If the companies really needed more workers to satisfy the demand that they're seeing, then clearly they would lower their standards and start hiring unemployed workers - otherwise, they would lose market share.

Or, they would make a fundamental hiring mistake, because they're conservative idiots and bottom feeders. They don't have to realize the magnitude of their mistake today. The company can feel it 4 years later, after all the people who made the mistake hopped to other jobs. Conservativism can cause a tremendous lag in the marketplace, hence the high unemployment. We can hope that companies who are not so conservative, take the risk, get good hires from the unemployed pool, and do well in the market.

Hiring the employed only works if you're offering enough money and incentive to wrest the employed person away from their previous job. Do the math on that.

There are three possibilities:
1. Person got fired with a cause
2. Company had to downsize due to economy. 200 out of 500 employees were let go
3. Company closed, everyone was fired.

Another company is hiring. They receive 1000 applications for a single position. Look at their thought process during screening:
1) loser, don't want to have anything to do with them
2) person did get fired, but 300 at same company did not. Why was that person let go, when 300 others were not?
3) why did that person stay at a sinking company till the end? Any ambitious or proactive employee would have noticed something was wrong and started looking for a new job before they were out of work.

Yes, on point 2 when I was in my notice period and looking for work before I was made redundant I kept the fact that I was being let go quiet. If asked in interviews I would trot out the old 'looking for a new challenge/new direction' reason (which was also true, only apathy and being comfortable stopped me looking for a job before I was made redudant/down sized).

Hiring the employed only works if you're offering enough money and incentive to wrest the employed person away from their previous job. Do the math on that.

For most upper tier employees, money is just a small factor.

10% pay increase does wonders when working assembly line, where you turn off the brain at work and it doesn't really make a difference what and how you do since it's standardized, but any higher level position today brings so much potential for stress and burnout that any kind of cultural mismatch or obstructive attitude cannot be compensated by money.

Think of a great enthusiastic and devoted programmer who needs to file 3 forms for every code change they make and wait 2 weeks for approval. There is no money that could realistically compensate for that.

[quote name='Prefect' timestamp='1298043704' post='4775913']If the companies really needed more workers to satisfy the demand that they're seeing, then clearly they would lower their standards and start hiring unemployed workers - otherwise, they would lose market share.

Or, they would make a fundamental hiring mistake, because they're conservative idiots and bottom feeders. They don't have to realize the magnitude of their mistake today. The company can feel it 4 years later, after all the people who made the mistake hopped to other jobs.
[/quote]
Oh, absolutely. But then a different company will get their market share, as long as there are no other impediments to the market functioning well.

Conservativism can cause a tremendous lag in the marketplace, hence the high unemployment. We can hope that companies who are not so conservative, take the risk, get good hires from the unemployed pool, and do well in the market.
[/quote]
I don't know. Are there many companies that are turning down contracts because they don't have enough employees? Or companies that cannot meet demand for their product because they don't have enough workers? Somehow, I doubt that this is currently a common phenomenon. It seems to me that the current situation is more that companies are mostly doing fine with the number of employees that they currently have, and they'd have to see significant spikes in demand to change their behavior.

On second thought, even if what you are saying applies, and the problem is that the vast majority of companies are conservative bottom feeders, you have to ask yourself how you can change their behavior. Obviously you can't just force them to employ more people - that type of policy has been tried many times in the past, and it was thoroughly unsuccessful.

So it comes down to the same thing: You have to make sure that they are seeing clear signals that get them to change their mind. Seems to me that an increase of demand is the best signal to achieve that, but perhaps you're thinking of some alternative?

Well that's the catch-22 isn't? Demand is not going to up unless employment goes up which in turn brings consumer confidence up. Although companies may have a firing freeze right now, they also have a hiring freeze as well. So spending is not going to go up because the risk of X amount of goods and then losing your job is too high and too great.

- Hiring someone who's already employed creates a vacancy in their old position (no total job loss)
- Hiring someone who's already employed requires a higher pay, better benefits, better working conditions, or other enticement (Career boost, so on). There are special cases of course, such as lateral moves to avoid pending collapse.

In other words, it has no/little impact on the number of job but the standard of compensation for positions goes up. Seems to me that this is the logical first-step in economic recovery, since eventually the positions as a whole will need to be filled to meet demand infused from increased compensations.

---

On another note, we only looked at two groups of people when doing our last hiring round. First group was already employed (self or other), second group was anyone who 'did something', even unpaid, during the down time. Education of any form, private projects, anything related to the field of work (computer science general or programming specific). If it just said "looked for job for X months" or had no explanation, we moved on.

Why? Because there were more than enough of these two groups to hire. It's a gamble if the resumes with a time void were really enriching themselves or using it as XBox time. There are an amazing number of people who did private projects such as games, web applications, whathaveyou during that time to learn new skills or keep current. Specifically in this line of work, one can get rusty if they remain idle. Plus, it is a show of self motivation and discipline.

Obviously this doesn't apply to skill-less labor positions, but the earlier points still apply.

So you had two groups

• Programmers who were already employed
• Programmers who kept their skills current even though they were unemployedAnd I bet the unemployed programmers don't get paid as much as the already employed programmers. Also, the already employed programmers are probably considered, more, for manager, senior or higher positions. The unemployed are to fill the other positions.
  
  Obviously, you'll correct me if I'm wrong.

So you had two groups

• Programmers who were already employed
• Programmers who kept their skills current even though they were unemployedAnd I bet the unemployed programmers don't get paid as much as the already employed programmers. Also, the already employed programmers are probably considered, more, for manager, senior or higher positions. The unemployed are to fill the other positions.
  
  Obviously, you'll correct me if I'm wrong.
  

(I'm a part of the hiring committee for our department)

Wasn't like that at all. Same bucket, same jobs. Then again, we're a large company and the pay ranges and positions are pretty fixed with a very small room for wiggle. What they were skilled in determined what position they were applied for.

Someone doing their trade without being paid is very highly smiled upon. After reflection, I was actually giving those candidates preferential mind. What they were doing recently was usually what we discussed as a group first-off, and we were sure they were interested in their line of work. People who worked on their own stuff during that time were more passionate about discussing what they've been doing, as opposed to "I was working on X system" crowd from the already employed. We did only accept 5 people and 3 were already employed, but that really was because 2 of the positions are in a very specialised area that only the already-employed candidates had previous skills in.

As I said above though, it isn't skill-less labor. I could see that happening in many other industries. But that goes back to my first two original points in that there would be no total lost jobs and just a compensation raise among the employed.

Edit: After thinking about it more, I think the most hurt group might be the "I do it for the paycheck" group. They are the group who (seem) to be less likely to do intermediate career-related upkeep between jobs, as everyone we talked to had passion about the work they did during their unemployment stint. Additionally, I would guess that those with less passion would be the glut of the let-go groups during downsizing. This is anecdotal conjecture, of course.

Well that's the catch-22 isn't? Demand is not going to up unless employment goes up which in turn brings consumer confidence up. Although companies may have a firing freeze right now, they also have a hiring freeze as well. So spending is not going to go up because the risk of X amount of goods and then losing your job is too high and too great.

Exactly. Except that there is one actor in this whole mess which is able to resolve the catch-22 by unilaterally increasing spending: the federal government.

Economically speaking, that is the way to get the US out of the mess it is currently in. Unfortunately for the citizens of the US, the deficit terrorists have a stranglehold on both the government and the media, so that even liberals and those that can be considered to be "the left" from a European perspective (i.e. not the Democrats) want to reduce federal government spending. It would be great comedy if it weren't so sad for those who suffer from the misguided policies.